Jeunesse RICO settlement challenged
Back in August it was announced Jeunesse had settled a lawsuit alleging RICO violations for $2.5 million.
Through an amicus curiae brief filed on December 7th, Truth in Advertising (TINA) has opposed the settlement.
According to the consumer advocacy organization, Jeunesse’s settlement ‘provides no meaningful benefit to‘ victims and permits ‘Jeunesse to continue unfettered with the fraudulent scheme that forms the basis of this case‘.
TINA has labeled Jeunesse’s $2.5 million settlement “paltry compensation”, and claims it ‘will inevitably result in the vast majority of distributors receiving nothing‘.
This is based on, among other things, the $2.5 million settlement weighed up against lawsuit allegation that Jeunesse victim losses run into the hundreds of millions of dollars.
TINA’s brief also claims the settlement effectively “protects Jeunesse” and permits it to operate unabated.
The injunctive relief in the proposed settlement fails to address the fundamental elements of plaintiffs’ complaint, namely that Jeunesse uses deceptive marketing tactics to lure consumers into an illegal scheme in which they are destined to fail.
The proposed injunctive relief gives nothing but the illusion
that Jeunesse’s deceptive marketing practices and business structure will be affected by the proposed settlement.
Although not part of TINA’s brief, it’s important to note the settlement also protects non-settling defendants MLM Mafia, Jason Caramanis and Alex Morton.
MLM Mafia and Caramanis maintain
the claims against them were frivolous and without merit, and on this basis they refuse to be part of any settlement in this action.
The terms of the settlement however specify ‘a resolution of the entire action, thereby disposing of all claims against all parties‘.
This includes claims against MLM Mafia, Caramanis and Morton.
One final point of contention in TINA’s brief is the attorney-fee carveout which, when combined with the cost of providing notice to class members, will eat up around 45% of the $2.5 million settlement amount ($1.12 million).
Concluding that ‘the proposed settlement agreement is of no benefit to class members‘, TINA has asked the court to ‘deny approval of the proposed settlement.‘
Notably, Jeunesse was none too happy about TINA’s request for permission to file an amicus curiae.
In an overruled opposition filed on December 4th (by way of TINA being granted permission to file on December 5th), Jeunesse wrote;
TINA is not a disinterested party in this litigation. TINA has repeatedly published inaccurate information concerning Jeunesse on its website and through press releases.
In October 2015, TINA filed an erroneous complaint about Jeunesse with the Federal Trade Commission and the Attorney General of Florida (neither of which acted on the complaint).
Settling Defendants take no position on TINA’s request to file an amicus brief.
The arguments made by TINA in its motion and accompanying brief, however, are factually and legally wrong—just as TINA’s 2015 complaint to regulators and its press release about the settlement are wrong.
It is noteworthy that Jeunesse provides no counter-evidence to TINA’s claims. Instead it erroneously equates a lack of action by the FTC and Florida AG to TINA’s complaint containing errors.
For our part BehindMLM reviewed Jeunesse in late 2015 and found a significant focus on affiliate autoship.
Since then nothing much has changed, and we have no reason to believe Jeunesse is generating significant revenue via retail sales.
Another interesting development is a December 10th brief in opposition to the settlement, filed by Helen Xiong.
Xiong separately sued Jeunesse in a proposed California class-action filed in August.
In her lawsuit Xiong claimed that in practice, Jeunesse affiliates earn commissions for recruitment rather than retail sales.
On November 28th Xiong’s lawsuit was stayed, pending the entry of a final order in the RICO lawsuit.
Xiong’s lawsuit will resume after the order is made. It’s important to note however that as part of the RICO lawsuit settlement, any Jeunesse victims who file a claim in the RICO settlement are prohibited from participating in Xiong’s class-action.
Not really sure how all of this is going to play out at this stage. Stay tuned for updates…